Is it too late to get $10,000 in emergency SBA grants from the EIDL advance? That is the question we are going to answer today. Welcome back to your blog where we’re happy to help you grow your small business into the success story you know it can be! While we’ve provided other articles on general information about starting a small business, such as How to Start a Business Plan and How to Write an Executive Summary, today we’ll be focusing on a timelier matter: financial relief for small businesses during the coronavirus pandemic.
As you may or may not already know, the SBA or Small Business Association has instated many financial programs in order to support the reopening of and economic assistance for small businesses in all 50 states and US territories. In most cases, the SBA defines a small business as a business with 500 employees or less. And, while we’ve discussed the other two programs, the PPP (Payroll Protection Program- a loan that will be forgiven if at least 60% of the funds are used on payroll, and the remaining funds on rent, mortgage, or utilities) and the EIDL SBA loan (Economic Injury Disaster Loan – a more broad loan program that allows borrowers to use the money for any range of approved business costs that could have been covered had the coronavirus pandemic not hit), in other pieces, today we will be focusing on the Emergency SBA Grant from EIDL Advance.
The Emergency SBA Grant is just that: a grant. Therefore, it doesn’t need to be paid back like the PPP and EIDL do, which are loans with accompanying interest rates. Additionally, if approved for the grant, businesses will receive their money within three days. This is especially helpful for businesses with time sensitive costs that are immediately threatening the welfare of their business. And to date, it has been awarded to nearly 5 million American businesses, totaling in $20 billion dollars of funds awarded.
One facet of the Emergency SBA Grant that should definitely be noted is that unlike the EIDL Loan, which can award up to $2 million, this grant is meant to be given on an emergency basis, therefore the maximum amount a company should expect to be awarded is $10,000. Additionally, not all businesses with receive the full $10,000. Instead, the SBA will review your business and its current circumstances and deem what amount is appropriate- oftentimes awarding $1,000 per employee. The other stark difference between the EIDL and the Emergency SBA Grant is that even if businesses were denied for the EIDL Loan, they can still receive the emergency grant.
Unfortunately, the EIDL advance has been discontinued as of July 11, 2020 since all $20 billion of the reserved funds were allocated. The SBA has released a statement saying that it is illegal for them to continue awarding grants to small businesses since the law responsible for instating this SBA grant outlined that the funds associated with this grant were not to exceed $20 billion. Additionally, at this moment in time, the same goes for the PPP or Paycheck Protection Program, although that doesn’t mean it’s not something to stay informed about. And if we look at the history of the EIDL loan program, you’ll understand why.
Similarly, the EIDL Loan Program also ran out of funding and temporarily stopped offering loans, however less than one week later, EIDL was reinstated. Therefore, we recommend that small business owners maintain hope about these coronavirus small business assistance programs. Due to the ever changing conditions of the coronavirus pandemic it is possible that these programs could be reinstated in time, or that similar programs might become available as the government reallocated funds, reconsiders business needs, and the amount of coronavirus cases fluctuates.
And while we understand it may be disheartening to hear that this advance grant program has been discontinued, also know that this is not necessarily the “end all be all” for getting your small business the financial help it needs. Visit https://www.sba.gov/funding-programs/loans/coronavirus-relief-options for a list of all the programs that the SBA is still offering to small businesses. Including the EIDL which we discuss at great length here, SBA Express Bridges Loan (a great option for those small businesses who already used an SBA Express Lender in the past, allowing them up to $25,000 to overcome loss of revenue due to the coronavirus pandemic); and SBA Debt Relief (an option for those businesses who did not receive assistance via the Paycheck Protection Program or EIDL, this program guarantees that the SBA will pay for 6 months of principal, interest, and other borrower fees for certain loans disbursed before September 27, 2020).
Additionally, rethinking your business model or visiting a bank directly for a private small business loan may help. Many small businesses were able to survive the pandemic by moving services online, offering curbside pickup options, or allowing employees to work remotely. A little bit of ingenuity can go a long way during times like these and we feel confident that if your small business can make it through this, it can make it through anything!
And, as we mentioned before, although the Emergency SBA Grant from EIDL Advance was a government run funding program, that doesn’t mean other great private options aren’t available to help you and your business get through these unprecedented times. In fact, we recommend visiting https://www.business.org/finance/loans/best-small-business-loans/ for an up to date list of the best private loans small businesses can get at this time. This list is updated on a weekly basis and lists out interest rates and funding options in a way that is easy to read and understand.
Overall, we wish you and your employees nothing but the best. Before we know it, 2021 will be here, and hopefully so will healthier, safer, and more stable times. Stay well and thanks for trusting us to provide you with guidance on your small business.